New Zealand Ifab 2013 Beverages Review
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iFAB 2013 BEVERAGES REVIEW January 2014 v1.00 iFAB 2013 The Food and Beverage Information Project What is the purpose of the food and beverage information iFAB 2013 The Food & Beverage Information Project is the first project? comprehensive overview of the state of New Zealand’s Food & Beverage (F&B) industry. Part of the Government’s Business The project pulls together the available information on the food Growth Agenda (BGA), it is an integrated programme of work and beverage industry into one place, in a form which is familiar focusing on the six key inputs businesses need to succeed, grow and useful to business. The reports contain analysis and and add jobs; export markets, capital markets, innovation, skilled interpretation of trends and opportunities to materially assist and safe workplaces, natural resources and infrastructure. with business strategy and government policy. Essentially, the BGA Export Markets goal will require lifting the The information will be of vital use to businesses, investors, ratio of exports from today’s rate of 30% of GDP to 40% by government, and research institutions as the industry expands 2025. This equates to doubling exports in real terms (or tripling and diversifies. This industry view will be very useful to exports in nominal non-inflation adjusted terms). This in turn government, enabling better dialogue and the opportunity to equates to achieving a 7% per annum growth rate over the next address issues collectively. twelve years. What benefit will this bring to businesses? This five-year project analyses the main sectors in F&B, including dairy, meat, seafood, produce, processed foods, and beverages, The Project will have many uses for businesses. These include: as well as providing an overview of how the industry is fairing in our major markets. It also conducts in-depth sector reviews on a – As a base of market intelligence to enable business to be rotating basis. The information is updated annually and feedback much more targeted in their own market research from users shows the project is acting as a vital tool for – Reviewing and informing offshore market development companies looking to expand and grow exports. (including export and investment) strategies – Assisting in identifying areas of innovation and R&D for Why Food & Beverage? the future – Identifying strategic partners and collaborators The Food & Beverage industry is vitally important to the New – Enabling a company to benchmark performance with that Zealand economy. Food & Beverage accounts for 56% of our of its competitors merchandise trade exports and one in five jobs across the wider – Monitoring industry activity value chain. In addition, F&B acts as a vital ambassador for the – Gaining a better understanding of their own industry country, being in most cases the first exposure global consumers sector get to “Brand New Zealand.” – Identifying internal capability needs or external inputs New Zealand’s F&B exports are growing strongly and the How will government use the reports? country’s export performance is strong and improving relative to peers. In the 15 years leading up to 2010, New Zealand's food and This information will provide much greater insight into the beverage exports grew at a compound annual rate of 7% per industry, which is useful for a range of policy development, from annum. So one way to look at the challenge is to ask – can we regulatory frameworks to investment in science and skills and continue to grow our food & beverage exports at the same rate? facilitating access to international markets. In particular, a single To understand if this is possible we need to know what has been source of factual information will enable government agencies to driving our success. better coordinate their efforts across the system and be more responsive to addressing industry issues. OTHER RELATED iFAB REPORTS iFAB 2013 This analysis of the New Zealand beverages sector forms a part of the wider Food & Beverage Information Project Other reports, including those from previous years, are available on the MBIE or Coriolis website… http://www.med.govt.nz/sectors-industries/food-beverage/information-project/ http://www.coriolisresearch.com/reports/ 3 NOTE ON DEFINITIONS iFAB 2013 The iFAB project splits the total New Zealand food & beverage industry into six separate sectors; to avoid double counting, products and firms are only defined and counted in one; some firms may be in another report “NOT SUBSTANTIALLY TRANSFORMED” “SUBSTANTIALLY TRANSFORMED” DEFINED AS DAIRY, MEAT, SEAFOOD DEFINED AS PROCESSED FOODS DEFINED AS BEVERAGES OR PRODUCE WHAT: Whole or minimally transformed WHAT: Products made from a mixture or WHAT: Juice, fermented or not, made from a products; typically one single predominant combination of ingredients, rather a single single fruit or vegetable or a mixture or ingredient; firms that predominantly pack these ingredient; firms that predominantly make these combination of ingredients; water products products Ingredients: Reconstituted vegetable juice blend (water and concentrated Tomatoes Ingredients: Concentrated Tomatoes, juices of tomatoes, carrots, celery, beets, Sugar, Salt, Concentrated White Vinegar, parsley, lettuce, watercress, spinach), Food Acid (Citric Acid), Natural Flavours contains less than 2% of: salt, vitamin c (Contains Garlic), Spices (ascorbic acid), natural flavoring, citric acid, natural flavor. EXAMPLES: Kiwifruit, milk powder, frozen beef EXAMPLES: Chocolate, ice cream, sauce EXAMPLES: Wine, soft drinks TRADE CODES: Primarily classified in the global TRADE CODES: Primarily classified in the global TRADE CODES: Classified in the global HS trade HS trade codes as HS02-15 HS trade codes as HS 16-21 codes as HS22/2009 EXAMPLE FIRMS: EXAMPLE FIRMS: EXAMPLE FIRMS: SEE RELATED REPORTS SEE RELATED REPORT THIS REPORT 4 iFAB 2013 BENCHMARK – EXPORT GROWTH BY SECTOR iFAB 2013 In 2012 beverages were the fastest growing core food & beverage super-category in absolute dollars and third fastest in percent terms ANNUAL CHANGE IN EXPORT VALUE BY TYPE PERCENT CHANGE IN EXPORT VALUE BY TYPE US$; million; 2012 vs. 2011 %; US$; 2012 vs. 2011 CORE F&B CATEGORIES Beverage $117 Other Foods 23% Processed Food $66 Pet & Animal Foods 14% Seafood $51 Beverage 10% Pet & Animal Foods $35 Seafood 4% Other Foods $35 Processed Food 4% Dairy -$23 Net Dairy 0% Core F&B +$67m Produce -$36 Produce -2% Meat -$180 Meat -4% F&B RELATED CATEGORIES Seed for sowing $30 Fertilisers 57% Live Animals $27 Tobacco 48% Tobacco $16 Supplements 33% Supplements $3 Seed for sowing 28% Fertilisers $3 Live Animals 15% HBC/Household -$2 HBC/Household -1% Net Pharmaceuticals -$7 Related F&B Pharmaceuticals -3% +$70m Source: UN Comtrade database; Coriolis classification and analysis 6 BEVERAGES – WINE – SITUATION iFAB 2013 The wine industry has shown rapid growth driven by Marlborough Sauvignon Blanc; further diversification into new varieties and new regions should occur going forward New Zealand wine Competitors The New Zealand wine industry has achieved spectacular growth over New Zealand wine competes directly with other premium temperate the last 40 years, going from NZ£51 in exports in 1960 to NZ$1.2b in climate countries. Key competitors include France, Germany, cooler 2012. Today New Zealand competes successfully with major wine parts of the US (e.g. Oregon) and Chile. producers, both old world (e.g. France, Germany) and new (e.g. Australia). New Zealand has achieved an overall premium price position in–market on par with France (which has been producing wine Consumers/Markets for ~2,000 years). Global Financial Crisis (GFC) depressed global demand, pushing down International success to date has been built almost exclusively on prices. These falling prices have impacted New Zealand wines. Marlborough Sauvignon Blanc which has become a “must-have” wine for major wine players. However good Marlborough wine area is now At the same time wine consumption is declining in many EU markets almost all used. This may be a good thing as Marlborough now has (France, Italy, Spain) for social, lifestyle and economic reasons. These almost as much area as Burgundy in grapes. twin forces, falling consumption and falling prices, have in turn triggered a decrease in global wine area and production, particularly in Emergent secondary regions are 20 years behind Marlborough in the three largest wine producers (France, Italy & Spain). On-going terms of development. Hawkes Bay, Waipara and Central Otago changes to EU subsidy systems have accelerated the process. stand out as the next best prospects. However, other than Hawkes Bay/Gimblett Gravels Syrah, most regions have yet to find “their” New Zealand’s success to date in wine has been primarily in the wine and the experience of Europe suggest this could take some time. Anglo-Saxon 4 (USA, Canada, UK & AU). Luckily these markets have had stable-to-increasing consumption. However, New Zealand Wine production is a fast growing industry for New Zealand, with a producers need to work to decrease reliance on these markets. number of firms, ranging from very large to very small. Many large wineries are now foreign owned and on-going acquisitions are China is an emerging growth market for wine globally and is now the occurring. Foreign ownership now plays a big part in the wine industry, fourth largest wine consuming country in the world in total (not per and these global firms with their global sales resources and reach, capita) volume, nipping at the heels of Germany. China is now New provide a path-to-market for introducing global consumers to New Zealand’s #5 wine export destination and the fastest growing market Zealand wines. by value. However there is a large group of successful medium sized New Available in-market data suggests that the growth of New Zealand Zealand owned wineries that, in many ways, are the key force driving wine is at the expense of French wines (i.e. that the two are close industry quality and innovation forward (e.g.